Do brokers see the value of vision insurance?

Although millions of Americans use some form of corrective lenses to see, when employers break out their vision plans as an ancillary benefit, the rates at which employees sign up for and use the plans drops dramatically.

For example, in 2008, the Bureau of Labor Statistics reported 42 percent of employees at large employers took advantage of ancillary dental plans, but only 16 percent participated in ancillary vision plans.

This is at least partially because many companies don’t offer stand-alone vision plans at the same rate they offer dental ones; that same study showed 50 percent of large employers offered a stand-alone dental plan vs. 19 percent that offered vision plans. Clearly, many employers don’t see the value in offering stand-alone vision coverage for employees, and it’s increasingly rare to find an overall health plan that also covers vision.

But despite the perception that vision coverage isn’t worth the effort it takes to find and secure a plan for employers — and, as a result, vision might not be seen as worth the investment for brokers who offer assorted ancillary health plans — there are compelling reasons why employers might want to consider providing vision-plan options for employees, and why brokers might want to listen.

Greg Rudisill, senior vice president of strategic partnerships at Frisco, Texas-based benefits provider Careington, who’s worked with Careington’s employee benefits programs for more than three decades, says he can see both sides of the argument.

“Originally, back in the ’70s, ’80s and throughout the mid-’90s, the preponderance of vision plans that were offered were employer-paid,” he explains. “So you had almost the entire employee and dependent population with access to the vision program. The employee wasn’t paying for it, and the costs were very low, so it wasn’t a dollar swap.

“What started happening around the late ’90s is that employer dollars started getting used up because of increasing medical costs, so instead of continuing to offer vision as a benefit for all employees, employers started shifting the cost of dental and vision insurance — ancillary costs — to employees,” Rudisill continues. “And then you get voluntary selection, where only the employees who know they’re going to use the full amount available will sign up for the plan.”

However, Rudisill notes, there are good reasons why employers would want to encourage staff to participate in an annual vision exam.

“With a vision exam, the doctor can catch all kinds of medical maladies during the course of that exam,” he notes. “Cancer problems, diabetic conditions — they can save a person’s eyesight and life and get them in to get treated more quickly so medical costs for some of those serious conditions aren’t as expensive.

Windows to good health

David Noel, vice president of sales for Sparks, Maryland-based benefits consultant Workforce Tactix, says that vision insurance provision has been evolving for years, and that by examining what some of the largest businesses in the country are doing — from Safeway to Walgreens to UPS — brokers and employers can see where vision plans are heading.

“One of the things we’ve seen with large companies is that they’re putting stock in vision insurance,” Noel says. “The eye is the single internal organ that presents itself at the surface. We can look at the eye and diagnose medical conditions without having to draw blood. And the large companies, which are typically self-funded, realize that if they can diagnose some of these things early on, it has a significant financial savings as the condition grows. Cancer is easier to treat in stage I than in stage IV. Vision plays a huge part in that.”

Joseph Torella, employee benefits national practice leader and president of the northeast employee benefits division of Chicago-based insurer HUB International, agrees — but he notes that the ability to link an eye exam with follow-up care is important, too.

“When you look at oral and ocular health, you’re looking for potential early indicators,” he says. “The goal, long-term, would be to have a carrier who can link the different levels together. If you see something in the eye exam, are you connecting it to other clinical indicators? All of these scenarios strongly suggest that a good population health program will connect the different areas where people will get their exams.

“If I’m looking at myself as a plan sponsor and what I should be doing for my employees, I think every company should be looking closely at biometrics and the early indicators of disease that might not manifest as a clinical read,” he continues. “The minute you see that your glucose level has deteriorated, you probably have some issues in the retina. If you have heart disease and diabetes together, and you’re classified as obese, then you’ve got some real potential for damage.”

And although population health isn’t something an employee signing up for a plan would likely consider, an employer benefits from offering strong vision and disease-management programs, Torella notes.

A question of choice

Employee education — and an employers’ understanding of what a particular employee population wants and needs in terms of coverage — is another facet of the vision question. Chris Costello, principal and founder of Woburn, Massachusetts-based benefits brokerage CBG Benefits, helps employers deploy surveys that help them ascertain what products staff would like to see offered, from pet insurance to vision.

“We’re big proponents of choice in the workplace,” Costello says. “You might get folks who say, ‘Only a third or half of my group really needs vision coverage,’ but you can’t really start to split hair — because maybe you don’t wear glasses, but your husband or your kids might. People have to keep things in perspective and maybe offer plans that aren’t going to provide you with Armani glasses but will provide you with the basics.”

Torella says that in many cases, health savings accounts can take the place of a dedicated vision plan, while allowing employees who don’t need a vision benefit to use those funds for other medical costs.

“The idea of a company being paternalistic and giving all benefits to all people is a wonderful concept when you can afford it,” he says. “Over time, we’ve gone to a more consumer-driven model — you’ll make different choices if you have a family with three children and all three of them need glasses. As an employer, do you really want to make the decision of what’s important to your employees, or do you want to give them a budget and give them the responsibility to determine where that dollar amount goes? Those decisions are exactly why we have HSAs, which allow people to become more accountable.”

But the growing proliferation of health savings accounts and flexible spending accounts also might contribute to declining employee enrollment in vision plans.

“Typically, an individual member consumer will put pen to paper to decide whether it makes sense to buy a voluntary vision plan,” Rudisill says, “and if they don’t feel there’s enough value, then they won’t enroll in the plan. They might instead put their money in their FSA or HSA and use those tax-advantage savings to get their ancillary services, like vision.”

The discount route

Rudisill also mentions the possibilities of employer-funded discount plans, which offer steep discounts to employees for eye exams and vision products, including contact lenses and glasses.

“It’s extremely low cost compared to insurance plans, and it offers savings that range anywhere from 20 percent to more than 50 percent,” he notes. “We encourage the use of FSAs or HSAs in combination with our vision discount product. So the member gets the savings from a tax perspective by setting aside the money pre-tax, and then they go into the network of providers we offer, and they can save an additional percentage on their vision care needs. We believe that’s a better alternative than offering a voluntary insurance plan, and people are very happy with the discount products.”

Rudisill explains the provider networks for discount programs typically are much larger than for an insurance plan — often including large retailers such as Target and J.C. Penney — and employees can see exactly what a given service or product will cost and what the discount will be before booking an appointment.

“If they know what it’s going to cost them in advance, they can set aside that specific amount of money in their FSA account, and it’s also a benefit because it’s a program that’s very easy to implement and use,” he says.

“And providers love it because they don’t have to do a lot of administrative work like with an insurance plan — a typical vision discount plan might cost $1 or less per month, whereas with an insurance plan, you’re going to spend $20 to $25. And many times with a discount plan, they’re so low-cost that the employer will pick up the access cost, so all the employees have access, and they don’t have to go through the enrollment process.”

Featured Topics

An analysis of Medicare Fee-for-Service claims data shows a substantial shift in site of care for outpatient drug therapies from the physician office to the hospital outpatient setting from 2008 to 2015.

While auto features in retirement plans have proved helpful in boosting both participation and savings rates, a new study indicates that they could be a lot more impactful if savings rates were set higher.